Central costs of pathology reorganisations revealed

HSJ obtained details of the central costs of the projects in the former NHS Midlands and East strategic health authority cluster through a Freedom of Information request. Concern has been expressed by NHS managers, unions and pathologists about the cost and service implications of the reorganisations.

The response said during 2011-12 and 2012-13 nearly £900,000 was spent on central “legal/financial costs”, £874,000 on “contractor/consultancy SME costs”, £268,000 on central “staff pay costs”, £4,600 on software and £1,400 on conferences.

The news follows the West Midlands procurement process being abandoned earlier this month because commissioners did not believe it would deliver the “clinical and financial benefits” previously anticipated.

Bidders have also raised concerns the region’s tender process – currently on hold – would also be ditched.

They also fear the East Midlands’ tender process, which is currently on hold, will also be abandoned. Meanwhile, an on-going Office of Fair Trading investigation into pathology mergers has cast uncertainty around attempts by trusts in the East of England to join services together.  

The work is being led by the former cluster’s strategic projects team which is now hosted by a commissioning support unit.

The team has always maintained that upfront investment will lead to greater long term savings but recent events show clinical commissioning groups are not of this view.

Unions and industry figures said the total costs were spiralling.

One senior figure from a leading pathology firm told HSJ the cost to private sector bidders and NHS trusts involved in bids would “easily add up to £10m”.

He said: “When you consider the man hours trusts have had to put into bids of senior staff, bands 7, 8 and 9, and then consider the amount spent by bidders, which will ultimately be priced back into future NHS bids, £10m seems a fair estimate.

“The west and East Midlands procurements were appallingly badly designed,” he said.

“We have stopped working on the East Midlands procurement as it’s our view it is almost certainly going to fall over.”

Unite representative Barbara Rush said: “The current [OFT investigation] will now incur more legal costs and this is all funded from public money.

“Unite is very concerned about the costs of setting up of the East of England pathology venture - much of which is hidden from view.

“The costs incurred in setting up IT, procurement, transport systems and redundancy payments can only be guessed at and this is without the added cost pressure of the contracts with the CCGs, the income base for the venture, being scrutinised more closely.

“However, of even greater concern is the risk to the service.”

HSJ approached the strategic projects team but it declined to comment.